EQUITY TECHS: E-MINI S&P: (Z5) Trades Through The 20-day EMA
- RES 4: 7000.00 Psychological round number
- RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 1: 6953.75 High Oct 30 and the bull trigger
- PRICE: 6801.00 @ 14:26 GMT Nov 6
- SUP 1:6748.50 Intraday low
- SUP 2: 6702.18 50-day EMA
- SUP 3: 6690.75 Low Oct 22
- SUP 4: 6571.25 Low Oct 17
The trend condition in S&P E-Minis is unchanged, it remains bullish and the latest pullback appears corrective. Support at the 20-day EMA, at 6803.81, has been breached. A clear break of this average signals scope for a deeper retracement and exposes the 50-day EMA at 6702.18 - a key pivot support. The bull trigger has been defined at 6953.75, the Oct 30 high. Clearance of this hurdle would confirm a resumption of the uptrend.
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EURIBOR OPTIONS: Call Condor Buyer
ERM6 98.50/98.625/98.75/98.875c condor, bought for half in 10k (ref 98.07).
US SWAPS: J.P.Morgan Turn Bullish Front End Spreads
Late on Friday J.P.Morgan turned bullish on front end swap spreads for several reasons:
- Quarter end passing meaning that funding conditions are likely to remain soft.
- Accumulated Other Comprehensive Income (AOCI) at banks set to increase modestly, potentially improving their demand for Tsys.
- Spread narrowness offers pickup vs. IOR
- Expected slowing of $IG issuance.
- As a result, they recommended longs in 3-Year swap spreads and 3s/5s swap spread curve flatteners.
GILTS: Firmer Following Solid Demand At Latest BoE APF Sale, Bailey Eyed
Gilts continue to hold onto the bulk of the weakness linked to the political situation in Japan and France.
- Solid demand at the latest round of BoE APF sales of short maturity gilts (3- to 7-Year) is worth a ~1bp rally in 3-, 5- & 7-Year benchmarks, helping the space further away from session lows.
- Futures -22 at 90.72 vs. session lows of 90.41.
- Bears remain in technical control. Initial support and resistance in futures still located at 90.26 & 91.28, respectively.
- Yields 1-4bp higher vs. Friday’s close, curve still steeper on the day.
- SONIA futures +0.5 to -2.5, twist steepening.
- BoE-dated OIS continues to price ~5bp of easing through year-end, which we think is underappreciating the odds of a cut during that window.
- BoE Governor Bailey is due to speak today, delivering the keynote speech at Scotland’s Global Investment Summit 2025. The text will be released at 16:00 London.
- There is no title attached to the speech and it is therefore unknown at this point whether Bailey will be discussing anything relevant for monetary policy.
- We will provide a little more colour ahead of the speech.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Nov-25 | 3.960 | -0.7 |
Dec-25 | 3.915 | -5.2 |
Feb-26 | 3.809 | -15.9 |
Mar-26 | 3.779 | -18.8 |
Apr-26 | 3.703 | -26.5 |
Jun-26 | 3.678 | -28.9 |
Jul-26 | 3.628 | -33.9 |
Sep-26 | 3.615 | -35.3 |
